Foreign Perspectives

Archive for the ‘Banking’ Category

Now that Barclays have scapped the excellent Woolwich Cardsaver account, are there any alternatives that give a similar level of usefulness from a savings account?

Sadly, none offer the combination of reasonable interest with international debit card access but there are a number of accounts around at the moment which offer most of the attributes of this sadly missed account.

If you don’t fail the credit check, the Egg Money card is excellent. This gives you a Mastercard debit card with no cash withdrawal charges at home and abroad (foreign exchange of 2.75% applies), good interest when in credit, an excellent rate if you’re overdrawn with it and internet access. Where it falls down is that it isn’t a true bank account so you need to quote the reference number on your card when making payments and you don’t seem to be able to get cheques written from the account if you needed to withdraw more than the £500 daily limit (although you could buy things with it). Also, since it is a credit card (albeit intended for savings), they run a credit check on you which may not suit everyone and there would normally be a charge for paying cash into the account as they don’t have any branches. Interest is about 0.75% more than Cardsaver and you even get a cash rebate on things bought using the card.

Similar to this is Cahoot which is a full bank account which offers an even greater range of facilities than the Egg Money account. Downside on this one is that there is a 1.5% withdrawal charge when used overseas (plus exchange rate charge). There’s a credit check on this one too and again no branches although you can pay money in via Post Office branches. Interest is about 0.5% more than Cardsaver.

Intelligent Finance is a more complex version of Cahoot but without the access to Post Office branches. Interest is about the same as Cardsaver if you go for their cheque account, about 2% more if you go for their savings account. Deposits are only by cheque in the post or electronically from another account.

The Easy Access Savings Account from Ulster Bank and First Reserve from Natwest offer pretty much all the facilities of Cardsaver (it’s a Solo debit card instead of Visa Electron) but with a much lower interest rate. However, as the equivalent account issued by Royal Bank of Scotland (who own Ulster Bank and Natwest) only has a cash card (Cirrus, so useable internationally) I wouldn’t depend on the debit card facility remaining. As it’s a savings account, there’s no credit check. Interest is about 1 to 1.5% below the Cardsaver rates.

Beyond the above, you’re limited to cash card based accounts, and for internationally useable ones there seems to be only one option: the Instant Access/Instant Savings Tracker accounts from Royal Bank of Scotland (Cirrus system, interest about 0.25% less than Cardsaver depending on your balance).

The best account for you depends on your needs. Cahoot is best overall in giving good interest and access to Post Office branches for deposits and withdrawals plus it’s a full current account. If you want to avoid the credit check the accounts from Ulster Bank and Natwest are the only ones with debit card access although if you want international access and can do without the debit facility, the Royal Bank’s Instant Savings Tracker account pays more.

If you drop the requirement for international access, your best bet is probably Smile‘s savings account at 4.5% (if you have their current account too) or indeed their current account on its own at around 3% (ie Cardsaver level) which is accessible through their branches and the Post Office too.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

French banking practices are very different from those in the UK in several key areas and it’s those differences that we’ll concentrate on here.

Conseilleurs

In the UK, a bank advisor is there to do things like advise you what to invest your money in and to sell you insurance but in France Conseilleurs don’t do anything as complex as that and are required to do really simple stuff like changing a direct debit or opening a savings account. This wouldn’t be so bad but you always need to make an appointment to see “your” advisor because, for reasons which escape me, the others that may be there on the day you go in can’t do that kind of simple task for you.

Of course, this approach means that each advisor is clogged up with work at the trivial end of the scale. For example, if you want to open a savings account in the UK, you fill in a form, hand in ID and cash and the cashier opens it there and then. Here it can take several weeks to open even the simplest account. So, ’tis best to develop a relationship with your advisor here as you’ll be making untold numbers of appointments to see them.

In the UK, a bank advisor is there to do things like advise you what to invest your money in and to sell you insurance but in France Conseilleurs don’t do anything as complex as that and are required to do really simple stuff like changing a direct debit or opening a savings account. This wouldn’t be so bad but you always need to make an appointment to see “your” advisor because, for reasons which escape me, the others that may be there on the day you go in can’t do that kind of simple task for you. Of course, this approach means that each advisor is clogged up with work at the trivial end of the scale. If you want to open a savings account in the UK, you fill in a form, hand in ID and cash and the cashier opens it there and then. Here it can take several weeks to open even the simplest account. So, ’tis best to develop a relationship with your advisor here as you’ll be making untold numbers of appointments to see them.

Overdrafts in the UK are “permanent” in that there is no problem in running an account that is constantly in the red. In France, you can only be overdrawn for 10 days per month and for the rest of the month the account must be in credit. That said, you can get a permanent overdraft facility from some of the proper banks. They all seem to implement this by giving you a credit card which is linked to your current account; when you are overdrawn outside the 10 day limit an automatic cash advance from this card takes you back into credit. French banks don’t charge cash advance fees so in practical terms this gives you something that works very like a UK overdraft.

Debit cards come in two basic varieties: immediate debit or deferred debit. Immediate debit operates just like a UK debit card ie purchases are charged to your account right away. With deferred debit, your purchases are charged to your account at the end of the month. In both cases there is a spending limit of around EUR 3000 per month and a withdrawal limit of EUR 300 per week.

Credit cards are quite rare in France at the moment but operate much the same as in the UK with the exceptions that there is no cash advance fee and they charge per transaction for all international purchases. Interest rates are generally higher than in the UK too. The other difference is that the amount you repay per month isn’t a set percentage but goes in bands eg EUR 15 or EUR 30 per month.

Store cards are available but usually require proof of your French income so can’t be obtained until a year or two after you get here. The one exception that we’ve found is Auchan which offers you it’s store card about a year after you sign up for it’s loyalty card and doesn’t require anything beyond a passport.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

For most people the answer is simple: they’ll look it up in their favourite price comparison site.

They’d not find it there, or at least they would but the ranking systems used don’t always mean that the cheapest card pops up on the top of the list, especially when you consider that the majority of such sites are financed by income from affiliate links so there’s generally a certain amount of bias built in. Anyway, because of this I thought that I’d look through all the offers around and find which one was really the cheapest.

That wasn’t nearly so simple a task as you might think. Although there are rules about how they should display their charges in fact that tends not to work to the advantage of the lower charging cards as much as you might expect.

Anyway, I thought that I’d finally got it sussed and it was the ICE travel money card that was far and away the winner. After all, it was free to issue and renew when all the rest charged, so how could it not be the best? Well, the FairFx card was coming in at £1 per withdrawal vs £1.75 a go for ICE so at some level of spending FairFX would pull ahead of course. Still, it was £10 to issue and £6 to renew so you’d need a more than 10 cash withdrawals a year for it to be cheaper.

But then a few days after I posted the article, I found out that you can get the card free (via the link here) which levelled up the playing field and then I checked further into the exchange rate charge and they only charge 1%. I still don’t like cards that charge though and that £6 renewal charge was there albeit only every three years.

However, now it turns out that the FairFX people have free renewals so long as you topup your card at least once every three years so in fact what seemed like a potentially high charging card turned out to be the cheapest one by a long way.

And that’s the snag of the charges tables that the rules insist on: the FairFX card doesn’t sit well in them because, by and large, its charges are conditional. The £10 issue fee is optional in fact but clearly stated in the table. Likewise for the renewal fee. Their currency conversion charge is “about 1%” because they give you the best available at the time so they don’t seem to be able to state that in the charges table.

Anyway, you can read the full review over on my other blog.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

Barclays Bank bought the Woolwich Building Society around seven years ago but really did very little to integrate the two outfits until now. In fact, the only visible changes until a year ago were that the Woolwich stopped issuing credit cards under its own name and various documents started having “a trading name of Barclays Bank” or words to that effect added to them.

The original reason put forward for their purchase was to acquire the technology that Woolwich used to implement its excellent Open Plan account, an account that let you offset any savings that you have against your mortgage. Not really a great reason on the whole as the Woolwich technology was extremely primitive even then and, though operational, did silly things like charge you interest when you wrote a cheque against money that you actually had in a linked savings account and then refunding that the following month.

In due course, Barclays ran up a version for themselves and improved the offering from the Woolwich.

However, they got around to fully integrating the Woolwich into Barclays so all existing Woolwich accounts last year and the Woolwich accounts don’t exist anymore. Snag is, that the Woolwich offered a number of quite sophisticated savings accounts and Barclays only has very simple ones.

Naturally, Barclays is putting this across as a series of “improvements”. They list 10, so let’s look at each one:

1. You’ll have over 30,000 staff waiting to help you including many who are presently serving customers in the Woolwich.

So, you’ll have Barclays staff to look to. OK, more people, so let’s count that as a real improvement

2. You can use any of the 1,700 or so Barclays branches in the country and any Barclays Hole in the Wall machines.

You could do that before the merger so that’s hardly an improvement.

3. You’ll have access to Barclays telephone and online banking*, so it’s easy to manage your money when our branches are closed.

Woolwich already have phone and online banking, so that’s not an improvement.

4. You can get the same tailored service you expect from your Woolwich branch, only more so you can book an appointment with one of our Personal Bankers. And our specialists will help to make sure that all your financial needs are covered.

Actually, you’ve been able to do that for around eight years now.

5. You can choose anything from a wide range of Barclays products and specialist services.

You’ve always been able to do that.

6. You can also arrange your foreign currency and International Money Orders at any Barclays branch, at our Bureaux de Change or by calling the Barclays Travel Line on 0845 600 8090**.

You’ve always been able to do that, though hardly a recommendation given their charges.

7. You will also have peace of mind of knowing that your money remains safe with us. For instance, we offer free security software to active online customers.

OK, we’ll give them that one.

8. Barclays has a broader range of products and services so we can help you with your business finances as well as your personal ones.

Actually, it offers a narrower range of products though it does do business finance so let’s count that as a plus.

9. We also do more in the community. Spaces for Sports is just one example we’re investing over £30 million in helping communities to transform their sporting facilities in the UK.

Well, if memory serves, the Woolwich was pretty active in supporting local communities before it was taken over.

10. The same friendly staff will be there, helping us to stay one of the top 20 big companies in Britain to work for.

So, no change is counted as an advantage of the change?

However, what about the accounts that are changing. In fact, almost every single one is being downgraded.

Cardsaver

A very popular account which offers a Visa Electron debit card and pays quite good interest.

This becomes a savings account which offers (on request) a card which will only work in Barclays machines in the UK. Moreover, it will no longer be possible to get counter cheques so if you want to withdraw more than the cash machine limit (reduced from £400 to £300), you’ll need to open a Barclays current account. Oh, and you can’t make deposits in the ATMs any more.

So, this account has been “improved” by removing nearly all the facilities from it for which people selected it.

Open Plan for Savers

I suspect that the Barclays people have completely forgotten about this account.

This was even better in some ways as the Cardsaver account. It gave you on a savings account, a chequebook and full Visa debit card plus the ability to setup up to 12 separate savings accounts within it, each of which could have individual standing orders and direct debits against them.

This becomes a standard savings account which offers (on request) a cash card which will only work in Barclays machines and, again, a reduced limit of £300 per day. Of course, you can’t make deposits in the ATMs either.

If I’m right that they have forgotten about this account, it will cause chaos for those people who have it. All of a sudden their direct debits won’t get paid for a start. If they have remembered about it, I’d say that it could be rather a difficult account to map onto the Barclays range as it offers the equivalent to having up to 12 separate current accounts.

Almost all of the downsides arise from the fact that Woolwich was basically a savings institution when it was taken over whereas Barclays is a commercial bank. The effect of this is that the Woolwich had a much more sophisticated range of savings accounts and it would have been far simpler had Barclays adopted these rather than downgrading the accounts across the board.

After all, when the Halifax bought the Bank of Scotland, the accounts available to everyone in both institutions really did improve. But then, the Halifax was the savings institution and well aware that peoples’ savings needs aren’t met well by the offerings of banks. The Halifax/Bank of Scotland now offers everything that was on offer by both parties and indeed many products have been significantly improved by the takeover.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

For historic reasons, the various post offices and co-operative banking organisations in Europe maintain loose connections with their opposite numbers in other countries and it’s therefore often useful to open accounts with these organisations before you move.

For instance, the co-operative bank offer a service called Tipanet which offers quite cheap international money transfers: around £8 as compared to the £25 that a normal bank would charge you. In the UK, it’s the Co-Operative Bank that does this, in France it’s Banque Populaire. The co-operative movement is quite frequently used by various unions and in France Banque Populaire offers special deals to public servants.

The post office links are even more widespread and various special arrangements exist between considerable numbers of national post offices for their account holders. However, information on these isn’t widely distributed and it can take a little searching to find out about them. One advantage that almost all give you is that a post office account effectively gives you government issued proof of address once your first statement arrives.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.